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US economy grew a solid 2.2% in the
second quarter, government says, upgrading previous estimate
[October 01, 2026]
By PAUL WISEMAN
WASHINGTON
(AP) — The U.S. economy grew at a solid 2.2% pace from April through
June as consumer spending and business investment came in strong.
Growth in gross domestic product — the nation’s output of a goods and
services — decelerated from a 2.5% pace from January through March, the
Commerce Department reported Wednesday. The second-quarter growth was an
improvement on the department’s previous estimate of 1.5% — a surprise
to economists who had expected little or no change in the GDP number. |
A Coherent manufacturing facility in Sherman, Texas, Tuesday, June 16,
2026. (AP Photo/Jeffrey McWhorter, File) |
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Consumer spending — which accounts for about 70% of U.S.
economic activity — increased at a healthy 3.8% annual pace, up
from 0.7% in the January-March period. Spending has been helped
by a strong stock market, which reflects enthusiasm over the
prospects for artificial intelligence and which enriches wealthy
investors and gives them more money to buy things with.
The overall growth number was dragged down by imports. They are
subtracted from growth because GDP is only supposed to count
domestic production. Imports rose at a 12.6% annual pace from
April through June, partly due to a surge in shipments of
computer chips and other products that support artificial
intelligence investment, and slashed nearly 1.7 percentage
points off second-quarter growth.
The U.S. economy has proven surprisingly resilient in the face
of fighting with Iran and the energy price spike it caused.
Business investment, excluding housing, rose at a 9% clip in the
second quarter, reflecting the AI investment boom. And a measure
of the economy’s underlying strength — which strips out volatile
government spending and trade numbers — grew at a strong 4.6%
rate, up from 1.8% in the first quarter.
“The economy is increasingly reliant on AI gains and the
corresponding wealth effects boosting higher-income households’
spending power to fuel recent growth,” said Michael Pearce,
chief U.S. economist at Oxford Economics. "The economy remains
sensitive to a sudden reversal of optimism on AI.''
Investment in housing rose 2.8% ticking up for the first time
since the end of 2024. The housing market has been depressed by
high mortgage rates.
Wednesday’s report was the last of three Commerce Department
estimates of second-quarter GDP growth. The first look at
third-quarter growth is due Oct. 29.
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